How Peabody gets dirt-cheap land and the rest of us get a gigaton of carbon pollution

The BLM lets Peabody lease public land for next to nothing and strip-mine it for coal.

On Thursday, the Bureau of Land Management (BLM) is scheduled to hold an “auction” for 721 million tons of taxpayer-owned coal in the Powder River Basin.

This is for the North Porcupine tract, and like the South Porcupine tract that BLM leased to Peabody last month — even though this coal is owned by you and me — the lease was drawn up by Peabody itself for its own profit. This is what’s known as a “lease by application,” and under BLM’s corrupt coal-leasing program, Peabody will almost certainly be the only bidder and pay next to nothing.

WildEarth Guardians’ 2009 report “UnderMining the Climate” [PDF] found that over the last 20 years, only three of 21 lease by applications had more than one bidder. Since Peabody knows it will face no competitive pressure, it can simply offer the lowest possible price, secure in the knowledge that if it doesn’t meet BLM’s absurdly low minimum price, it can just try again later. In fact, that’s just what happened with the South Porcupine tract; Peabody’s initial offer of just $0.90 per ton was rejected as too low by the BLM — so they simply held another auction a few weeks later and accepted Peabody’s offer of $1.11 per ton. In both “auctions” Peabody was the only bidder.

Incredibly, BLM’s coal-leasing program deliberately encourages this uncompetitive process. Allowing lease by applications was a key change made possible once the BLM moved to decertify the Powder River Basin as a coal-producing region — even though it’s the source of almost half the coal mined in the U.S. BLM is supposed to manage this coal “in the best interests of the nation,” and it has a process meant to determine the fair market value of a lease. But as Tom Sanzillo explains [PDF], the BLM’s methods dramatically undervalue the coal, so much so that it has amounted to a $28.9 billion subsidy over the last 30 years.

It’s clear that the BLM’s coal-leasing program is deliberately designed to benefit a few coal mining companies like Peabody and Arch at the expense of U.S. taxpayers. This has become even more outrageous now that coal mining companies are seeking to dramatically expand exports of this taxpayer-owned coal. And that’s why Rep. Ed Markey (D-Mass.) has called [PDF] for a Government Accountability Office examination of the BLM’s coal-leasing practices.

Beyond the lost revenue, however, BLM’s undervaluing of this coal is helping fuel the devastating impacts to public health, the environment, and our climate system that inevitably accompany mining and burning this much coal. The BLM is facing a lawsuit from WildEarth Guardians and the Sierra Club because it ignores the impacts of the greenhouse gases that will result from leasing this coal.

And the amount of carbon pollution that will be emitted when this coal is burned is enormous.

The 721 million tons of coal contained in Thursday’s South Porcupine lease amounts to 1,196,456,240 metric tons of CO2 — just over a billion metric tons, or a gigaton of CO2. That’s over 10 times the 101 million metric tons of CO2 that the federal government hopes to reduce its own emissions over a decade-long period under President Obama’s executive order. Despite the fact that the emissions from burning this coal would not be possible without the BLM’s leasing activities, the government does not include emissions associated with federal leasing of coal, oil, and gas in its inventory of federal emissions.

We can also make sense of the vast amount of carbon pollution we’re talking about here with the help of the Environmental Protection Agency’s greenhouse gas equivalencies calculator. The emissions from the 721 million tons of coal in the South Porcupine is equivalent to the annual emissions of over 234 million passenger cars — that’s nearly all the cars in the U.S. Another way of measuring this coal — especially important for those in the Pacific Northwest resisting the industry’s efforts to ship it through their communities for export to Asia — is that 721 million tons of coal is enough to fill 6.5 million train cars.

The BLM’s corrupt coal-leasing program is fueling climate change with billions of tons of carbon pollution, and it’s been a rip-off for U.S. taxpayers for decades. If the BLM proceeds with the auction of the North Porcupine tract Thursday, they can expect to be confronted by protesters. How long does the industry think it can keep this boondoggle going as it seeks to turn the American West into a resource colony?